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The African Agribusiness and Agro-industries Development Initiative (3ADI)

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The African Agribusiness and Agro-industries Development Initiative (3ADI)

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  1. High Level Conference on the Development of Agribusiness and Agro-Industries in Africa The African Agribusiness and Agro-industries Development Initiative (3ADI)

  2. Executive Summary • The 3ADI presentation is delivered in 3 Modules First, is the introduction and context Second, is the Program Framework: 4 main areas Third, is the Program Approach: building on other initiatives in Africa and means to build alliances . • Main Messages: • We are not re-inventing the efforts in Africa but rather build on them • Great opportunities exist in agro-industries for serious interventions and building of capacity: HR and Technology

  3. Overture What makes 3ADI different • Developed by Africans • Proposed, written, and presented by Africans. • It’s about financially and commercially viable interventions • It’s about adding value • It links with the private sector, especially small producers and processors

  4. Expectations 3ADI what we are aiming at • A programme for the promotion of agribusiness and agro-industries development endorsed by African Heads of State and Government (HOS). • Agreement to establishment financial modalities for agri-business and agro-industry investment endorsed by HOS. • Action plan for programme implementation and financial mechanisms endorsed by HOS. • Launching of the African Agribusiness and Agro-industries Development Initiative (3ADI)

  5. 3ADI How did we get here? • Global Agro-industries Forum (GAIF), New Delhi, India, April 2008 • Hosted by the Government of India • Event jointly organized by FAO, UNIDO and IFAD • Participation from 110 countries; 500 senior level delegates • Representatives of 44 African countries recommended the organization of a regional forum • need to consider specific issues and priorities for agro-industries and agribusiness development in Africa • Consultations with African leaders and organizations led to the decision to hold this High Level Conference on the Development of Agribusiness and Agro-industries in Africa – HLCD-3A • www.gaif08.org

  6. 3ADI HLCD-3A Co-organizers • Government of the Federal Republic of Nigeria (Hosts) • African Union Commission (AUC) • African Development Bank (AfDB) • Food and Agriculture Organization of the United Nations (FAO) • International Fund for Agricultural Development (IFAD) • United Nations Economic Commission for Africa (UNECA) • United Nations Industrial Development Organization (UNIDO)

  7. 3ADI Consultative Process • Concept Note Developed by UNIDO and FAO • Background document commissioned by UNIDO/FAO; “Accelerating Agribusiness & Agro-industries Dev. in Africa” • Expert Group Meetingon Development of Agribusiness & Agro-industries in Africa: Constraints & Opportunities. 27-29 April 2009 – Vienna • UNIDO/FAO/ Executive Secretariat meetings with the Government of Nigeria on administrative & logistic matters. 4-7 May 2009, Abuja - Nigeria • Writers workshop - 26-30 May 2009 – Rome

  8. 6. CAADP:private sector convening on CAADP implementation, 17-18 June, 2009 - Dakar, Senegal 7. UNECA Expert Group Meeting on Promoting Agro-industry & Agribusiness Development in African Countries, 22-24 July 2009 - Addis Ababa 8. Periodical Meetings of the Joint Organizing Committee; Vienna, Rome, Abuja & Tunis Meeting on Financial mechanisms in Support of Agro-industries & Agribusiness Development in Africa; hosted by AfDB in Tunis, Jan. 2010 3ADI document - African Agribusiness & Agro-industries Development Initiative: A Programme Framework 3ADI Consultative process- II

  9. 3ADI Needed Investment (I) • Capitalizes on renewed impetus for growth & development for Africa through increased agricultural investment • Recognizes the need for increased agro-based investments in order to meet food security goals Cumulative Investments over 2005/07 in billion US$ Source: Capital Requirements for Agriculture in Developing Countries to 2050, FAO, Rome, 2009 US$ 15 billion/year in additional investment needed

  10. 3ADI Needed Investment (II) 3. Recognizes urgent need to increasing profitability (i.e., strengthening effective demand for finance) of agribusiness & agro-industries. 4. Focuses on ways to unlock local capital to meet agribusiness & agro-industry investment needs, especially in short run until public sector investments take hold.

  11. The African Agribusiness and Agro-Industries Development Initiative PROGRAMME FRAMEWORK

  12. The goal of the 3ADI is to have an agriculture sector in Africa which, by the year 2020, is made up of highly productive & profitable agricultural value chains that: 3ADI GOAL & 2020 Targets • effectively link SMS agricultural producers to markets; • contribute effectively to increasing farmers’ incomes through value-addition processes; • supply higher-valued & differentiated food, fibre, feed and fuel products to consumers at local, regional & global markets; • lead to retention of a higher proportion of the consumer price in the communities or countries where the primary production takes place; • utilize natural resources in an overall sustainable manner; and • act as an effective basis for industrialization & generation of increased & high quality employment

  13. Main Objective To increase private sector investment flows going into the agriculture sector in Africa by mobilizing resources for agribusiness & agro-industrial development from domestic, regional & international financial systems 3ADI Main Objective

  14. 3ADI What the Initiative will do? • Specifically the Initiative will: • Leverage current attention to agriculture in Africa to accelerate the development of agribusiness & agro-industries sectors that ensure value-addition to Africa’s agricultural products; • Support a well coordinated effort to share knowledge & harmonize programmes in ways that capture synergies, avoid fragmented efforts, & enhance developmental impacts; • Support an investment programme that will significantly increase proportion of agricultural produce in Africa that is transformed into differentiated high-value products.

  15. 3ADI Expected Results (I) • Four main areas of support essential for agribusiness & agro-industries devmt: • Enabling policies & public goods; • Value chain skills & technologies; • Post-production institutions & services; • Reinforced financing & risk mitigation mechanisms

  16. 3ADI Expected Results (II) • 1. Enactment of enabling policies & provision of public goods: • (i) Sector Strategies & Plans; • (ii) Legal and Regulatory Frameworks; • (iii) Grades & Standards; • (iv) Agricultural Mechanization; • (v) Markets & Trade Infrastructure; • (vi) National & Regional Trade Policies

  17. 3ADI Expected Results (III) • 2. Development of skills & technologies needed for post-production segments of agricultural value chains: • (i) Producer, Commodity & Industry Associations; • (ii) Value Chains Facilitation; • (iii) Producer & SME Skills Building; • (iv) Technology Development & Transfer; • (v) Vocational, Business & University Training

  18. 3ADI Expected Results (IV) 3. Innovative Institutions & Public Services: (i) Contract Farming & Out-grower Schemes; (ii) Business Incubators, Hubs & Clusters; (iii) Research, Technology & Agro-Food Parks; (iv) Product Labelling & Certification Schemes; (v) Commodity Exchanges & Market Information

  19. 3ADI Expected Results (V) • 4. Finance & Risk Mitigation: • (i) Public-Private Partnerships; • (ii) Loan Guarantees; • (iii) Investment Funds; • (iv) Value Chain Finance; • (v) Risk Mitigation Products;

  20. The African Agribusiness and Agro-Industries Development Initiative PROGRAMME APPROACH

  21. 3 5 5 1 3 2 4 5 5 5 Edaphoclimatic Conditions Subsidies: US$ 350 billion/yr …the bulk of world food production is still concentrated in few regions…

  22. ...during the food crisis (food security) among the most affected areas, Africa is included & the food import bill of the region have been of US$254billion in (2007), 33% higher than in 2006... Source: IMF, 2008

  23. 30 …although the share of MVA of developing countries has increased in the last 25 years it still responds to a limited amount of the world MVA… Source: UNIDO, 2006; MVA – Manufactured Value Added

  24. 5 12 31 41 47 20 6 3 …and Africa, besides having the lowest share within developing countries’ MVA has even experienced a decreased from 06 to 03%… Source: UNIDO, 2006

  25. 3ADI Programme Approach (I) • CAADP Pillar II as overarching Institutional Framework; • Integrating into RECs; • Priority focus on domestic & regional markets; • Public support for engaging the private sector; • Synergistic & complementary financial mechanisms; • Preliminary ideas on innovative financial facility

  26. 3ADI Programme Approach (II) CAADP, particularly Pillar II, is the overarching institutional framework • 3ADI contributes to overall objectives of CAADP while addressing primarily its Pillar II • Improving rural infrastructure & trade-related capacities for market access

  27. 3ADI Programme Approach (III) Integrated into African Regional Organizations, Alliances & Initiatives • An African owned initiative • it will work closely with African Regional Organizations & Regional Economic Communities throughout all stages of its design, inception & implementation; • it should benefit from & be complementary to ongoing initiatives; • it will ensure stakeholder involvement through engagement with existing entities that represent agribusiness and agro-industries in Africa

  28. 3ADI Programme Approach (IV) Priority to Domestic & Regional Markets • Domestic food staples in Africa, roughly a US$50 billion industry, will double by 2015; • Growing potential of domestic agri-food markets in Africa, fuelled by rapid urbanization rates & income growth; • Increased trade in domestic & cross-border markets alone expected to reach US$30 billion by 2030; • Focus is consistent with priorities identified & pursued by African organizations and policy makers

  29. 3ADI Programme Approach (V) Public Support for Engaging the Private Sector • Engagement & cooperation of actors from both the public & private spheres of the African agri-food economy essential for success of 3ADI; • Public-private cooperation will be instrumental to implementation (also essential in mgt & oversight)

  30. 3ADI Programme Approach (VI) Synergistic and Complementary Financial Mechanisms • Designed to complement & act in synergy with the existing financial facilities, bridging the known gaps & unleashing newer financial opportunities, primarily those that can be supported by the African financial system itself • Unique features • focus on downstream segments of value chains • the strategic emphasis on leveraging financial resources from African banks • wider geographical coverage, when compared to existing programs and financial facilities that cover the agri-food sector in Africa. • African multilateral organizations & financial institutions will need to play an active role in any governance structure to be established for the 3ADI & its financial modalities

  31. 3ADI Financial Mechanisms of 3ADI • Consultations in progress • Parallel meeting of financial professionals is currently being held in another room to consider a concept and framework for financial modalities in support of 3ADI; • Concept tabled for discussion envisages a financing mechanism with two windows / channels that will deal respectively with public & private sector type funding; • After the outcome of the financial modalities in support of the 3ADI further consultations expected

  32. 3ADI The Way Forward • What we expect from your deliberations: • Discuss & refine the programme framework; • Advise on the development of the financing modalities; • Provide guidance on moving forward; • Commit to its implementation.

  33. 3ADI THANK YOU! For more information & follow-up, please check WWW.HLCD-3A.ORG

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